Respuesta :
Because the cost basis, $1,500, is less than the fair market value, $4,000. As a result, M's depreciable basis for jewelry equipment is $1,500.
The depreciation basis is the portion of the cost of a fixed asset that can be depreciated over time. Less the asset's expected salvage value at the end of its useful life, this is the asset's acquisition cost.
The acquisition cost of an asset is the purchase price plus the cost of putting the asset into service. As a result, in-person improvements (such as wiring or a concrete pad for the asset), installation fees, and testing costs can all be included in the acquisition cost.
Many businesses intend to use an asset once and then discard it. If this is the case, they assume that there will be no salvage value, in which case an asset's depreciation basis is the same as its cost. The standard approach is to use no salvage value in the derivation of the depreciation basis because it reduces the complexity of the depreciation calculation.
To learn more about depreciation basis, please refer:
https://brainly.com/question/28800236
#SPJ4
